Start trading Cryptocurrency CFDs with a regulated online broker.
Trade Crypto with AvaTrade. Table of Contents
- Why trade cryptocurrencies with AvaTrade?
- How to trade with cryptocurrencies?
- Factors to keep in mind while trading cryptocurrencies
- Start trading cryptocurrencies at AvaTrade
- Why trade cryptocurrencies on AvaTrade's platforms?
- What Makes Cryptocurrencies Ideal for Trading?
- FAQs of Cryptocurrency Trading
Why trade cryptocurrencies with AvaTrade?
AvaTrade offers all traders the opportunity to trade on a wide range of major digital currencies 24/7.
Due to the incredible popularity in recent years, cryptocurrencies have become a popular and conventional asset.
The main objective of this new technology is to allow people to buy, operate and invest without the intervention of banks or other financial institutions.
- Uncompromising Security
- With six regulators and segregated accounts, your money is always protected.
- Several cryptocurrencies to choose from
- Trade the wide range of cryptocurrencies available on AvaTrade’s trading platforms.
- Zero Hidden Fee
- AvaTrade offers zero commissions and no bank transaction fees.
- Cryptocurrencies never sleep
- AvaTrade is one of the few brokers to offer 24/7 service and support in 14 languages.
- Advantageous leverage
- Increase your starting capital with AvaTrade’s advantageous leverage and gain more exposure for your trading than you have in your account. The leverage offered is up to 2: 1 (for EU residents) and 25: 1 (for non-EU residents).
- Limit your risk
- You can pre-set profit and loss levels by using stop loss and take profit orders in your trading. Determine the maximum amount you are willing to risk when speculating on the price or setting a price from which you wish to benefit. AvaTrade also places future orders such as “buy stop” and “buy limit” at your disposal.
- Trade cryptocurrencies against fiat currencies
- Unlike many exchanges on the market that place restrictions on their clients in trading cryptocurrencies with other cryptocurrencies, AvaTrade’s clients can also trade cryptocurrencies against fiat currencies (USD , EUR, JPY, etc.).
How to trade with cryptocurrencies?
The original way to trade cryptocurrencies would be to create a bitcoin wallet by purchasing them with tangible currency and then trade the aforementioned on a cryptocurrency exchange site with the altcoins of your choice.
This way the trader has to securely maintain one or more digital wallets to store and trade digital currencies and is more prone to cyber theft and hacker attacks targeting trading sites.
Conversely, when trading with AvaTrade, no wallet is required as trades are executed through AvaTrade’s online trading platform protected with the SSL system.
All this represents a great advantage for the trader who can thus avoid thefts and threats from cyberspace.
Factors to keep in mind while trading cryptocurrencies
The cryptocurrency market changes very fast.
New cryptocurrencies are born and others disappear.
What attracts people to the world of cryptocurrency is the idea of protecting themselves against the devaluation of their national currency.
More and more retail stores have begun to accept Bitcoin and other digital currencies as a form of payment.
In Japan, on the other hand, after the go-ahead from the government which has officially recognized the cryptocurrency, it is becoming increasingly popular and used.
In the beginning, bitcoin was mainly accepted by the internet black market, but over time it has moved beyond the confines of the niche, gaining popularity, and has been used by brick and mortar companies and online.
With more and more companies accepting it as a form of payment, banks are starting to realize that this new product has the potential to change the financial world and gain partial financial control from governments and large lenders.
There are several factors that can cause the price of cryptocurrencies to rise or fall.
To begin with, just like with Forex, the higher the demand the higher the price.
Furthermore, the purchase of the currency by traders who base their business on speculation can influence the demand and therefore the price.
News from the media about the growth of cryptocurrencies has an effect on the price of these and Bitcoin in particular.
For example, there have been a number of negative comments from national regulators in China in recent years.
In 2013, China announced that financial institutions should beware of the popular Bitcoin, which resulted in a drop of up to $ 300.
Their initial concern was that it might interfere with normal currency policy information.
In 2014, the price of Bitcoin dropped further as Bitcoin exchanges stopped receiving deposits from banks and in 2017 it was rumored that the Chinese Central Bank was enforcing additional regulations on digital currency exchanges that would account for most of the trading volume of Bitcoin.
In 2014, a strong hacker attack occurred to break down the barriers and take the Bitcoin exchange completely offline.
During this time and until things returned to normal, there was a 23 percent drop in the price.
Various influencers over time have and can drastically and quickly influence the price of digital currency.
Overall, the cryptocurrency market is at an all-time high of over 60 billion, due in part to the fact that people have understood what cryptocurrencies (really) are and are increasingly considering them as an investment to add to their portfolio of trading.
Start trading cryptocurrencies at AvaTrade
Cryptocurrencies are a form of money of the future and have the potential to transform the entire global financial system.
Regardless of the negative issues surrounding cryptocurrency trading, more and more people are using them, thus increasing the demand for it and this is the reason why the price is rising.
Its volatility makes it an excellent alternative in any financial trading portfolio.
If you intend to trade, remember that in addition to Bitcoin, there are also altcoins capable of reaching significant market shares such as Ether, Bitcoin Cash, and Litecoin.
It should also be specified that cryptocurrencies have already suffered sudden slowdowns and as with any other investment, it could happen.
Meanwhile, discussions continue on how these currencies could be managed and how to regulate their price.
However, the matter is still very fresh.
The long-term ramifications are still unknown and the cryptocurrency does not yet have a definite direction.
Why trade cryptocurrencies on AvaTrade’s platforms?
Why trade cryptocurrencies on AvaTrade? For starters, AvaTrade offers benefits that normal cryptocurrency trading platforms don’t.
Another point definitely in favor of AvaTrade’s offer, the possibility of short selling, which is the process to be able to continue trading even during the market downturn and be able to profit from the fall in prices.
To keep in mind, also the high financial leverage.
This refers to the broker’s recovery of funds, thus offering the trader a much larger position with minimal investment.
And finally, the availability of automatic trading, both algorithmic through the use of pre-programmed trading bots, or social trading through the online copy program (the famous DupliTrade) towards the positions of experienced traders with proven success.
Join the cryptocurrency wave today!
Here are the most popular cryptocurrencies at the moment:
1. Bitcoin (BTC)
This super powerful currency has not only paved the way for other currencies but is also the leader of the cryptocurrency world, with some pride.
A ceiling of 21 million Bitcoins has been agreed, therefore no extra Bitcoins can be produced over that amount.
When it was introduced, $ 1 was worth 1309 BTC.
But the wheel has turned and in 2017 Bitcoin hit an all-time high of $ 19,783.21.
This was certainly a historic moment for Satoshi Nakamoto, creator of Bitcoin.
2. Bitcoin Cash (BCH)
Bitcoin Cash (BCH) was born from the Bitcoin hard fork on August 1, 2017, and boasts a new blockchain with different rules.
The transition from the original version of the blockchain to the new version allowed the software to handle a higher number of transactions.
3. Bitcoin Gold (BTG)
Bitcoin Gold (BTG) arises from the second fork of Bitcoin (i.e. the second version originating from the Bitcoin source code).
This cryptocurrency maintains Bitcoin’s transactional history, so if you had Bitcoin before the fork, you now have an equivalent number of Bitcoin Gold.
This cryptocurrency aims to introduce an alternative mining algorithm less susceptible to ASIC-based optimization, thus allowing users to earn more with their computer cycles.
The term Altcoin is generally associated with cryptocurrencies launched after Bitcoin’s success.
In the beginning, these cryptocurrencies merely replicated the original Bitcoin.
Today there are over 1000 altcoins and the number continues to grow.
Most cryptocurrencies are launched with an ICO (Initial Coin Offering), a form of crowdfunding, in which developers raise a certain amount by offering a limited number of initial tokens to finance technological development.
Among the altcoins, there are Namecoin, Peercoin, Bytecoin, Deutsche eMark, Novacoin, Cryptogenic Bullion, Quark, DarkCoin, and Mangocoinz (for smartphones).
5. Ethereum (ETH)
Ethereum (ETH) is more than just a currency, it is like a giant computer hosting multiple computers around the world.
Ethereum can respond to complicated requests.
Its ability to host revolutionary computer programs, known as smart contracts or smart contracts, has provided Ethereum with a competitive advantage over Bitcoin and has attracted the attention of banks around the world.
This and other factors led Ethereum to gain nearly 10,000% in 2017!
6. Litecoin (LTC)
Litecoin (LTC) is similar to Bitcoin in several respects and is also one of the longest-standing cryptocurrencies on the market.
However, there are two significant differences between Litecoin and Bitcoin: speed and quantity.
Creating a block of Bitcoin takes 10 minutes, while with Litecoin it takes about 2.5 minutes, or 1/4 of the time.
Furthermore, Litecoin attracts several users, as it is possible to produce 4 times the amount of Bitcoin! However, Litecoin uses a very complex cryptographic system, so mining is sometimes more complex than for other cryptocurrencies.
7. Ripple (XRP)
Ripple (XRP) can be described as the next generation of payment networks.
This digital currency was originally devised with the involvement of financial industry leaders and to date Ripple has been a leading technology provider.
The cryptocurrency exploded in 2017, going from $ 0.0063 to over $ 1.
The cryptocurrency regarded as Ethereum’s main opponent.
The EOS blockchain has gained popularity due to the way it records and secures transactions.
It is a blockchain similar to that of Ethereum, but faster, more scalable, and which allows users to build decentralized applications more efficiently.
Market analysts promote the currency as “The Most Powerful Infrastructure for Decentralized Applications” and expect the currency to follow the “dump & pump” pattern, which could provide interesting opportunities in the short term.
What Makes Cryptocurrencies Ideal for Trading?
Cryptocurrencies allow traders to diversify their investment portfolio, with the price being determined primarily by supply and demand.
Their value has a low correlation to national economies or political scenarios.
When Bitcoin topped the gold price in 2017, US markets introduced 2 Bitcoin ETFs, attracting more and more institutional money to the cryptocurrency world.
In 2017, Indian Prime Minister Narendra Modi announced the gradual replacement of paper money with electronic currency.
In March 2018, the Marshall Islands announced the introduction of a cryptocurrency, which will replace the US dollar as the reference currency.
Other central banks are considering the adoption of blockchain-based technologies and it is, therefore, difficult to think that cryptocurrencies can disappear.
More and more cryptocurrency investors around the world have already discovered the benefits:
- Cryptocurrency trading allows traders to diversify their investment portfolio, with the price being determined primarily by market sentiment and supply and demand.
- Take advantage of some of the most traded cryptocurrencies today.
- Digital currencies offer a new form of high volatility investment.
- Cryptocurrencies are traded 24/7, even on weekends
FAQs of Cryptocurrency Trading
1. What are cryptocurrencies?
A cryptocurrency is a digital currency that is transferred from one person to another in virtual transactions.
Cryptocurrencies exist only in the form of data and not as physical objects.
In other words, it is not possible to hold a Bitcoin or put Ethereum in the safe.
Owning Bitcoin means entering into a collective agreement registered on each computer in the Bitcoin network in which the owner of the Bitcoin is attested and, more importantly, the legitimate creation by a miner.
2. What cryptocurrency miners do?
Cryptocurrencies are managed like cash but are mined like gold.
Mining is the process of verifying a cryptocurrency transaction.
People all over the world transfer virtual coins from one wallet to another, while miners use the processing power of computers to keep the blockchain alive and verify transactions.
When a new cryptocurrency is launched, the founders announce how many coins will be mined.
Once the required quota has been reached, no more coins can be produced.
The first digital currency was Bitcoin, which remains the benchmark for all other digital currencies today.
Other currencies that have entered the Olympus of cryptocurrencies include Ethereum, Ripple, Litecoin, EOS, and several other derivative currencies, including Bitcoin Cash and Bitcoin Gold.
3. Blockchain – What’s the technology behind cryptocurrencies?
Unlike traditional transactions, cryptocurrency transfers are not handled by banks or other financial institutions.
Whenever someone pays in electronic currency, the payment is recorded on a digital ledger, called a blockchain.
4. What is the blockchain?
The blockchain, or chain of blocks, is a register of individual transactions, called blocks, which are linked to each other and are encrypted.
The blockchain is constantly growing and is completely open to anyone.
Each block of the blockchain contains:
- The details of the originator, the beneficiary, and the amount of electronic currency.
- A hash, that is, a unique fingerprint.
- A hash of the previous block in the chain.
When a new block is created, it is sent to all users on the network.
Each user verifies the block, which is then added to the blockchain.
5. What is Tangle?
The biggest problem with the blockchain is its dependence on miners.
This is the reason why the cryptocurrency called IOTA (Internet of Things Application) was born in 2016.
IOTA aims to address the rising cost of transactions and network scalability.
The IOTA blockchain is called Tangle.
It is a blockchain without blocks and without chains.
In this system, the users themselves are responsible for validating the transactions.
This means that there is no need to wait for the approval of the miners.
The advantage is that users can thus benefit from commission-free transactions and faster processing speeds.
6. What is a cryptocurrency wallet?
It is software or hardware that offers the possibility to store and trade your cryptocurrencies.
Each cryptocurrency wallet is encrypted and unique.
When you send funds, you are effectively sending an encrypted message to the recipient.
Only the recipient’s cryptocurrency wallet can decrypt this message and then receive the funds.
A hardware cryptocurrency wallet has several advantages over other software wallets:
- It is immune to viruses or malware;
- Private keys are not exposed to the computer;
- It does not require importing into software;
- It is safer and more interactive;
- It uses open-source software that allows the user to validate the entire operation of the device;
- It can receive various cryptocurrencies.